A lawsuit against Fidelity by participants in their plan was just settled for $12 million plus certain relief provisions. The case, Bilewicz v. FMR, had claimed excessive fees were charged and that prohibited transactions had occurred. The part of the case related to float income will continue. Specifically, plaintiffs alleged that Fidelity charged record keeping fees of $335 per participant but should have been charged $10.

Under the terms of the settlement, relief includes:

• Outside funds will be offered.
• Different share classes of Fidelity funds will be included.
• Auto deferral will be raised from 3% to 7%.
• Revenue sharing paid from outside funds will be credited back to participants.

Thomas Clark of The Lowenbaum Partnership writes that the settlement was surprising given Fidelity’s history of fighting cases, even if costs are estimated to be a multiple of the settlement. He also wonders what the implications will be for Fidelity’s record keeping clients. Given the success of plaintiffs in similar cases, the settlement might not be that surprising.